Rhyl Sun Centre and Prestatyn’s Nova Centre could close for good after the council today withdrew all funding.

Denbighshire chiefs also announced they will not take over the arm's-length company they blame for failings at the centres as “it’s too much of a risk".

Clwyd Leisure - the trust responsible for operating the facilities which also includes the North Wales Bowls centre in Prestatyn on behalf of the local authority - claims it is now facing insolvency with a risk of 70 job losses and 55 seasonal posts.

But Denbighshire council says removing the subsidy should not prevent the trust opening the Sun Centre and Nova this season, as it has reserves.

The blow came after a meeting of Denbighshire’s cabinet, which was held behind closed doors today and ultimately left “the ball in Clwyd Leisure’s court".

During a media briefing held afterwards, council officers said they had “serious concerns” about the way the company was being run and the £200,000 that Clwyd Leisure would have been given, will now be set aside to promote leisure, tourism and events for the coast.

A statement released this afternoon by the council said: “Denbighshire council’s cabinet has agreed at its meeting today that it is not in a position to take over the running of Clwyd Leisure Ltd company, which is a private company run by its own board of directors. This was at the company's request.

“Cabinet has also agreed to withdraw its financial support to Clwyd Leisure Ltd, as of April 2014.

“Members of the public will be aware that discussions have been ongoing about the future of Clwyd Leisure.

“In December, the council issued a statement in response to concerns raised by Clwyd Leisure that it was unable to meet target savings identified three years ago in the Council's Medium Term Financial Plan.

“This cabinet decision is based on a detailed analysis of the position of Clwyd Leisure Ltd.

“In fact, the council has been looking at the future of Clwyd Leisure for several months, in partnership with the company (and at their request) and this process highlighted serious concerns about the way the company was being run and the operation of the facilities.

“Following this review, Denbighshire's Cabinet meeting in Ruthin agreed that the council cannot take over or continue to fund the company, as there are too many risks involved.

“The remaining £200k grant that would be provided to Clwyd Leisure Ltd in 2014/15 will be set aside to promote leisure, tourism and events for the coast - this is not an attempt to save this money.”

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The threat to the Sun Centre and Nova Centre had prompted more than 3,300 people to sign a petition calling for it to be saved.

Councillor Huw Jones, cabinet member for leisure, said: “Cabinet has taken this decision today to withdraw funding as of April and not to take over the company, as we had no option as there were too many concerns and issues about the way the company was being run.

“The facilities have been in a poor condition and have been badly run for a number of years. The council has a responsibility to make sure that any company running services on its behalf provides value for money with good standards of service and customer care. That has not been the case with Clwyd Leisure

“There are serious issues around management of the facilities, employment of staff, as well as health and safety concerns.

“In fact, the company itself recognises some of these issues and approached the council months ago, asking the authority to take over the company. We did positively consider this option, but there are simply too many risks involved.”

Hywyn Williams, corporate director of communities, said: “We have notified Clwyd Leisure that enough is enough and our relationship with them must come to an end. The council has fully consulted councillors in Rhyl and Prestatyn about this issue.

“The ball is now in Clwyd Leisure's court and they must now decide upon the next steps, but to be clear, the removal of this subsidy should not prevent Clwyd Leisure from opening the facilities this forthcoming season as we are aware they have significant reserves available to do so. This brings us back to the reason why we have lost confidence in them running the facilities.

“The council fully expects all arms length companies funded by the council to operate in a financially sustainable and sensible manner and similarly we expect all of them to find efficiencies. This is the case for other council services and the arms length companies are treated no differently.

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“This situation is the sole responsibility of Clwyd Leisure.”

Jamie Groves, Denbighshire's head of communication, marketing and leisure, said: "Visitors are telling us that they are not happy with the standards at the facilities run by Clwyd Leisure and in fact there has been a drop of over 72,000 in the visitor numbers at the Suncentre since 2008/09.

"We have seen many negative comments on social media and on sites such as trip advisor, criticising the offer. Those kind of comments are not good for the tourism industry as a whole.

"Improving the tourism offer along the coast is key priority for the council - the facilities run by Clwyd Leisure are having a negative effect on visitor numbers and people are actually staying away. It's not fair on other local businesses and we need to address that.

"Whilst we will not continue to fund the failure of these facilities, we want to make the point that funding of the leisure offer along the coast will continue. Indeed, Denbighshire has very ambitious plans to improve the facilities at the Nova, Prestatyn and Suncentre, Rhyl, which also links to improvements to the Pavilion Theatre.

"There is therefore a real commitment by this council to make sure that the leisure offer in Denbighshire is second to none, no matter who runs the facilities".